Windstream Corp., the telecommunications services-provider, set the interest rate it will pay on a $300 million term loan B-4 it’s seeking to refinance debt, according to a person with knowledge of the transaction.
The seven-year debt will pay interest at 2.75 percentage points more than the London interbank offered rate, said the person, who asked not to be identified because the information is private. Libor, a rate banks say they can borrow in dollars from each other, will have a 75 basis point to 100 basis point floor. A basis point is 0.01 percentage points.
The debt is expected to be sold to investors at 99.5 cents on the dollar, the person said, reducing proceeds for the company and boosting the yield to investors.
Lenders will receive one-year soft-call protection of 101 cents, according to the person, meaning the company would have to pay 1 cent more than face value to refinance the debt during the first year.
Proceeds from the new loans will be used to repay the company’s existing term loan A-2 and term loan B-1 both maturing in 2013, according to the person.
Bank of America Corp. is arranging the financing and will host a lender call today at 11:30 a.m. in New York with commitments being due tomorrow at 2 p.m., the person said.